Peter Phillips, grandson of the Queen, has stepped down from his charity role to avoid a commercial conflict of interest.

One of the Queen’s grandchildren founded a charity to oversee the monarch’s 90th birthday celebrations that then gave his own for-profit company the contract for staging the event, BuzzFeed News can reveal.

Peter Phillips devised the Patron’s Fund to arrange a mass street party on The Mall for the 600 charities and organisations supported by his grandmother. The charity then contracted his own events firm to make all the arrangements for an undisclosed fee.

Phillips, the 38-year-old son of Princess Anne, has since resigned as a trustee of the Patron's Fund to avoid a conflict of interest under Charity Commission rules.

His company, SEL UK Ltd, whose clients include his sister, Zara Phillips, has already faced criticism for charging the 10,000 guests £150 a head for places at the not-for-profit picnic, which will be attended by the royal family in July.

His role as the founder of the charity overseeing the event can now be revealed. The Patron’s Fund was set up to take ultimate control of the event and divide the ticket proceeds and separate sponsorship funds between the charities patronised by the Queen, which range from Cancer Research UK to the Dogs Trust.

A spokesman for the fund said in a statement that it had given SEL UK a “set management fee” but refused to comment on the amount or whether the firm would make a profit.

The statement ​confirmed​ that Phillips had resigned as a trustee in November due to Charity Commission guidelines. However, he remains in place as an “interim trustee” while a replacement is being recruited and was in post when the contract was awarded.

Asked whether other companies had been invited to bid for the contract, a spokesman for the charity said: “There would be no Patron’s Lunch or Fund had [Phillips] not come up with the idea and taken it to get approved by the Palace in the way he did.”

Jamie Singer, a lawyer involved in organising the event, said Buckingham Palace had approved the concept for the lunch in the knowledge that Phillips would run it and that his company, SEL UK, would charge a management fee.

When the Patron's Fund was established it needed three trustees and Phillips took one of the roles, Singer said. The role of SEL was discussed in detail with the Charity Commission, which found no reason why the company should be precluded from organising the lunch.

"It was however, always Mr Phillips's intention to step down as a trustee once the Patron's Fund was fully operational to ensure that there was no perceived conflict of interest and to ensure the integrity of the event and the charity were maintained," Singer said.

"The process of appointing a replacement for Mr Phillips is well underway and will be confirmed in due course."

A spokesman for the Charity Commission said: "The trustees informed us of the potential conflict of interest at the point of registration, but gave a written assurance to the Commission that the issue had been appropriately managed in accordance with the Charity Commission’s guidance."

The Patron’s Fund has promised the lunch will be largest ever street party to be held on The Mall, which will be festooned with union jacks to help create an “electric festival-themed atmosphere”.

It will be the “celebratory finale” to a weekend of festivities that will begin with a service of thanksgiving at St Paul’s Cathedral on Friday 10 June, followed the next day by Trooping the Colour, the traditional military parade to mark the Queen's birthday.

Local communities across the country are being encouraged to follow suit with their own street parties “to honour and thank Her Majesty’s extraordinary commitment to others”.

Philips has previously spoken about the Queen’s excitement about the event. "She's obviously been kept abreast through her office about all the developments," he told the BBC, "and the times I've had the chance to talk to her she's been excited by it."

He also spoke of the “huge amount of pride” he feels in being able to showcase his grandmother’s charity work.

“It is the first time ever that something like this has been hosted on The Mall and there is no better reason for doing it,” he said in an announcement of the event last July.

In total 1,000 tickets will be allocated by public ballot and the remaining 9,000 made available at the same cost to charities, which can use some of their tickets to fundraise.

In response to criticism about the high ticket price, Phillips said last month: "This is a not-for-profit event. SEL is being paid a set fee basically to take this from sign-off from the palace through to delivery of the event."

Tom Warren is an investigations correspondent for BuzzFeed News and is based in London.